Oceania Dairy Market Overview

MADISON - Jun 7/07 - SNS -- The USDA published its latest review of dairy market conditions in Australia and New Zealand today.

OCEANIA OVERVIEW:  The 2006 - 2007 milk production season has come to a close
in New Zealand.  End of season milk production figures indicate that output,
when compared to last season, is up 3%.  This is higher than earlier
projections.  Milk handlers state that late season weather conditions probably
are the influencing factors for the up tick.  In Australia, the milk
production season will conclude at the end of June.  Although current year to
date output (July - April) is trailing last year by 4.3%, milk handlers state
that the end of the year is finishing on a more positive note than earlier
projected and yearly production will not be down 9 - 10% as previously
projected.  At this time, projections are that output will total 9.4 billion
liters which will be 7% lower than the previous year.  Some much needed
rainfall has occurred over the past few weeks which is greening up pastures,
thus generating better late season grazing conditions.  Although the rainfall
is coming at a time which will not significantly impact the 2006 - 2007
production year, it is providing some optimism for dairy producers.  The
rainfall is providing needed moisture for winter crops and hopefully is the
start for good winter moisture.  In both New Zealand and Australia, continued
milk production is typical for the winter months which will clear to bottlers
for domestic drinking milk needs.  Most manufacturing plants have geared down
for the winter season and maintenance is occurring.  Many traders and handlers
state that year end closing stocks are the lowest in recent memory.  Traders
and handlers indicate that more suppliers than anticipated will be reaching
into upcoming production to fulfill current commitments.  Traders state that a
significant portion of milk production during the first half of the 2007 -
2008 season has been committed, with many buyers trying to lock in contracts
during the second half of the season.  Most traders and suppliers are not
willing to extend themselves that far into the upcoming production season.
Traders and handlers are quite surprised at the new buyer interest there is,
outside of regular and ongoing customers.  They indicate that buyers are
actively seeking a supply source so that they do not have to go through
another year of limited product availability.

0930c steve schneeberger  (608)250-3204

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STAT News Service